Technology in Logistics: Threat, Disruptor or Differentiator

Introduction

Technology has been changing the way we do business rapidly in the last few years across different industries. The “Internet of Things (IoT)” is now taking the form of the “Internet of Everything”. And the effect has been experienced by the logistics industry too. Businesses are exploring superior technologies like 3-D printing, drones and driverless cars. However, even at the existing level, technologies like data analytics, omni-channel logistics and RFID technology are making the processes within the industry seamless, automatic and cost-efficient.

We discussed the various facets of Technology with Logistics and Supply Chain Business Leaders across the region to find out their view of Technology within the logistics industry in Asia.

Technology as a Differentiator

About 90% of our clients believe that technology is a differentiator within the logistics industry. The ease of processing information and raw data to make business decisions has already spurred businesses towards growth. Businesses that are able to harness the processing of information to make instantaneous decisions will have an advantage compared to the other players.

Another technology that will play a major role in the logistics industry will be blockchain technology. Its implications range from simple asset tracking and transparency to real-time feedback from customers. Logistics, as the backbone of retail and e-commerce, needs to react and offer innovative omni-channel solutions that satisfy the demand for more personalized, dynamic delivery options as well as fulfillment services at a competitive price level. Blockchain technology enables businesses to drive this innovation.

Technology’s ability to connect people in new ways than before is already making a huge difference to the industry. Technology is in fact changing how we do business with decreasing human interface. Advanced technologies like 3D printing of spare parts are used sparingly in Asia due to cost concerns, however when businesses resort to using them, they have created a major impact in the way business is done.

Upcoming technologies with most impact on business

Keeping the Asian context in mind, the following technologies will have the most impact on businesses.

In the subsequent sections, features and benefits of the technology with the most impact on Asian businesses is discussed.

Data analysis

Processing information and availability of real-time analysed data will make a huge impact for businesses. One of the caveats shared was that data would need to be well-analysed to ensure instantaneous decision making instead of being superficial findings about the business. This included the use of predictive analytics in ensuring that the businesses were prepared for the economy of tomorrow instead on focusing on the present issues.

3D printing

The worldwide market for 3D printing grew at a compound annual growth rate of 35.2% to $4.1 billion (USD) in 2014, according to Wohlers Report 2015. The industry expanded by more than $1 billion with 49 manufacturers producing and selling industrial-grade 3D machines. One of the most pertinent impacts of 3D printing in logistics industry is cutting down the inventory storage. In time, the supply chain will become more efficient, more local and globally connected. 

Internet of Things (Iot) & blockchain technology

The IoT and Blockchain technology will be the key to efficiency within logistics and supply chain. The real-time visibility enables information to be shared at every level – allowing deficiencies to be identified quickly so that problems can be immediately rectified, or possibly even prevented altogether. With immaculate inventory management and customer service par excellence, customers can expect products and services exactly when, where and how they want them. The companies that can take advantage of these benefits in the near term will save money, increase efficiency and keep their customers happy.

Top challenges in integrating technology in business

Business leaders across Asia unanimously believe that there are two main challenges in integrating upcoming technology in their business.

Cost control

Leaders feel that Asia as a region is not ready to overhaul their technology landscape within the logistics industry. It does not have enough policies to afford these mature technologies and the cost is then not justified.

Volume struggle

Even if businesses were willing to invest in building the technological capabilities for their Asia operations, the volumes in Asia and especially in certain South East Asian businesses do not justify the investment. Asia is not a mature region within the industry usually emulating the western practices and is still catching up on popularising the industry trends. To be able to invest in superior technologies will only be the next step for businesses

Jobs in the futuristic organizations

With the advancement in technology, Artificial Intelligence (AI) will be taking over more and more jobs within the industry. For eg. Freight-forwarders might become redundant. In the changing technological landscape, more than any specific skills in employees, companies will be looking at more flexible people who can adapt to the changing environment.

Some of the skills that will be in demand in the future are:

• Data Science
• Operations skills
• Technology based skills (esp. app – design skills)
• Robotics based skills

Conclusion

With more and more exciting technologies coming up frequently in the industry, the job roles are definitely going to change drastically to be able to manage the new needs. It is therefore essential that businesses invest in upgrading their existing workforce as well as while hiring for a new position.

Recruiting the best of the best will be a daunting task. Supply chain solutions providers will have to look deeper and wider for experts - across verticals and deeper in the pool of passive candidates. Technology already makes it easier to connect with the active candidates, the question is - are they the best of the best? There is where having a great brand and a wide network comes in. You can have the best technology but if you don't have the right people, progress will elude you.

Some of my past articles:

• 5 Steps on How to Get Promoted
• Are recruiters still relevant?
• Hottest Supply Chain Jobs in Asia Pacific
• Executives, Shut Up more during the Interview!

About the author:

Radu is Deputy Managing Director of Morgan Philips Executive Search, heading the Supply Chain & Logistics Practice.

He has been living for the past decade across Singapore, Indonesia, and India, where he managed a spectrum of senior level placements and worked with a myriad of industrial clients. He is currently based in Singapore, but travels across the region for his assignments.

Feel free to connect with him or follow him on LinkedIn.

Morgan Philips Executive Search is the headhunting firm - 21st century version. We have created an extremely innovative digital model enabling you to recruit your talent better, quicker and more effective.